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Non-US$ Fixed Income Investment Question
Old 06-11-2007, 10:40 PM   #1
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Location: Santa Barbara
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Non-US$ Fixed Income Investment Question

This is my first post.

I'm a foreigner (non-US person) who got FIRE'd approximately 10 years ago. The custodian of my FIRE portfolio is a US discount broker and I'm classified as a US NRA (non-resident alien).

I was the proud owner of GIM, which is a non-US$, medium term, fixed income ETF. I was very happy with it until I got hit with a 30% US NRA tax on the dividends. I sold the ETF and bought a short term US$ CD that will mature in late December.

By early January of next year, I'd like my fixed income portfolio to look like this:

1. 25% short-medium (1-5 year) term US treasury notes or bills
2. 25% long (30 year) US treasury bond
3. 25% short-medium (1-5 year) non-US$ notes, bills, bonds, or CDs
4. 25% long (30 year?) bond

The first two are easy, I can buy US treasuries directly thru my broker.

If I have to, I can use Everbank in the USA to get FDIC insured SHORT TERM non-US$ CDs for number 3. However, I'd prefer another financial institution because I want mostly MEDIUM TERM (1-5 year) non-US$ bills, notes, bonds, or CDs. Of course, I DON'T want to pay the 30% NRA tax on the interest or dividends.

The fourth one is the bear. Does anyone know of a good NON-USA discount broker or a decent offshore bank where I could buy a long (30 year?) EURO bond?
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Old 06-12-2007, 02:23 AM   #2
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I have heard OK murmurs from EU expats in Italy about general service and such for HBSC which has branches in many countries, but have no personal experience with them.

They also have an "offshore" component (Jersey, Channel Islands) but if you are EU resident you'll still get hit with taxes from the new (2005) EU Savings Tax Directive or something like that.

I found a list here of countries that adhere to this:
What is the EU Savings Tax Directive 2005?

UK Crown Dependencies, the Dependent Territories of the Netherlands, and a number of other countries known as ‘Third Countries’ have also volunteered to abide by the principles of the EU Savings Tax Directive 2005.

The full list of countries affected is as follows: -

Andorra, Anguilla, Aruba, Austria
Belgium, British Virgin Islands, Cayman Islands, Channel Islands
Cyprus, Czech Republic, Denmark, Estonia
Finland, France, Germany, Greece
Hungary, Ireland, Isle of Man, Italy
Latvia, Lichtenstein, Lithuania, Luxembourg
Malta, Monaco, Montserrat, Netherlands
Netherlands Antilles, Poland, Portugal, San Marino
Slovakia, Slovenia, Spain, Sweden
Switzerland, Turks and Caicos, UK
For EU residents, even the 'traditional' out-of-region solutions (Switzerland, Caymans) are no longer options. I'm not sure where the new 'centers' are for such activity.. Singapore? Dubai? I see HSBC has 'offshore' acct. options in these places.

I looked into this briefly (pre-2005) when I moved from the US to Europe but my income is low enough that US taxes on investments -thanks, George!- are not onerous to me.
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Old 06-12-2007, 12:17 PM   #3
Dryer sheet wannabe
Join Date: Jun 2007
Location: Santa Barbara
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Thanks for the info and the link. I'm not EU. I'm South American so I'm going to look into what you posted.
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